The German Association of the Automotive Industry (VDA) anticipates a moderate 2% rise in new registrations, reaching 2.90 million vehicles and reported that passenger car market in the country is expected to see only limited recovery in 2026.

However, this figure remains one-fifth below the level recorded in 2019 due to economic challenges.

According to the VDA, new electric passenger car registrations in Germany could reach 979,000 units in 2026, marking an estimated 17% increase against the 2025 total.

This outcome depends on timely action regarding new government subsidies for electric vehicles.

The VDA indicates that transparent guidelines and straightforward procedures for these subsidies are necessary for businesses, consumers and dealers.

It noted that the administrative process must be practical for all parties involved.

The forecast expects battery-electric vehicles (BEVs) to register growth, with an estimated increase of 30% reaching 693,000 units in 2026.

In contrast, plug-in hybrid-electric vehicles (PHEVs) are projected to decline by approximately 5%, with registrations falling to 286,000 vehicles after a stronger performance in 2025.

Looking at international markets, subdued expansion is also anticipated.

Passenger car sales in Europe (EU, EFTA and UK) are predicted to rise by 2% to reach 13.4 million vehicles next year.

Exports of German-manufactured cars are likely to fall slightly by 1% in 2026 to reach 3.2 million units, yielding an export share of approximately 77.5%.

At the same time, domestic production of passenger cars within Germany is anticipated to shrink by 1% to total approximately 4.11 million units.

However, German car brands are expected to manufacture more vehicles abroad, with production outside the country projected at a 1% increase to 9.2 million units. 

In the country’s domestic electric vehicle manufacturing sector, output is expected to rise again in 2026.

Production is forecasted to grow by 5% overall primarily due to an 11% rise predicted for BEVs while output of PHEVs is set to drop by 10%.

The commercial vehicle sector continues to operate under difficult conditions.

The trailer and bodywork industry remains under strain; new registrations are down by 5% overall for trailers and by 14% for heavy semi-trailers over six tonnes compared with previous periods. 

Current registration figures remain below those witnessed during the Covid-19 pandemic low point in 2020.

For buses, the VDA expects that Germany’s market will reach 6,200 units during 2025, a 15% increase compared with preceding numbers but following this period, a decrease of about 5% is projected for the year ahead. 

VDA president Hildegard Müller said: “In Germany, 1.76 million electric passenger cars are expected to roll off the assembly lines in 2026—a strong signal. Germany is thus consolidating its position as the world’s second-largest production location for electric cars.

“The figures clearly show that the German automotive industry is continuing to go full throttle on e-mobility. It is now important that Brussels also reaches corresponding clear decisions promptly, following the German Government’s decision for greater technological openness.”